Federal Discount Rate
What is the Federal Discount Rate? The federal discount rate is the rate that central banks charge banks and deposit-taking institutions to borrow money from the central bank to deal with very short-term shortages of liquidity in meeting reserve requirements on a collateralized basis via a lending channel called the discount window. In the U.S....
Financial Risk Manager (FRM®)
What is a Financial Risk Manager (FRM®)? A Financial Risk Manager (FRM®) is an accreditation offered by the Global Association of Risk Professionals (GARP) that certifies the understanding of risk management concepts that are validated by international professional standards. Broadly speaking, financial risk management is the active process by which the economic value of a...
Flat Yield Curve
What is the Flat Yield Curve? A flat yield curve is a type of yield curve that occurs when anticipated interest rates are steady, or short-term volatility outweighs long term volatility. It signifies that the difference between yields on short-term and long-term bonds minimize, in effect giving no incentives for investors and lenders to lend...
Joseph Stiglitz
Who is Joseph Stiglitz? Joseph Eugene Stiglitz is a renowned American economist. In 2001, Stiglitz was awarded the Nobel Prize for Economics for his foundational theory of markets with asymmetric information. He received the award together with fellow American economists Michael Spence and George Akerlof. Joseph Stiglitz’s Life and Career Joseph Stiglitz was born in...
Joseph Effect
What is the Joseph Effect? The Joseph Effect, which derives its name from a Biblical reference, is a phrase created by Benoit Mandelbrot, a Polish-born French-American mathematician. The phrase asserts that variations over time are normal and often part of wider trends and patterns, instead of being random. In essence, the Joseph Effect indicates whether...
